China scoops up recycled paper

VANCOUVER - Paper collected each week from blue box programs
has become the latest commodity to rocket up in price as a new
player -- China -- is scooping up almost one-third of North American
newsprint to recycle it in its own mills.

VANCOUVER - Paper collected each week from blue box programs has become the latest commodity to rocket up in price as a new player -- China -- is scooping up almost one-third of North American newsprint to recycle it in its own mills.

China collected nine million tonnes of all types of recovered paper from North America in 2006, up 15 per cent from 2005, much of that from West Coast American cities. China's entry into the recycling business is pushing up prices, raising concerns over a supply crunch for recycled fibre in North America and prompting questions about whether a "recycled" label still means a smaller environmental footprint.

Container ships bringing manufactured goods to West Coast American ports often return to China loaded with newsprint and other recycled paper, where it is being used to supply the country's burgeoning demand for paper products.

"People are putting paper out in their blue boxes. But 29 per cent of it is going offshore," said Graham Kissack, director of sustainability at Vancouver-based Catalyst Paper.

It used to be case that blue box collections were used locally, but the globalization of the paper industry has changed that, according to David Ford, president of Metafore, a Portland, Oregon-based company that works with consumers and the forest industry to develop awareness of environmental and social responsibilities.

"The reality today is that recovered paper fibre is a commodity. It is now going into a world market where before it wasn't. There are profound implications of that on the environmental footprint."

Mr. Ford said Chinese plants mostly use coal to provide the energy to make paper, asq opposed to relatively cleaner hydro-electric power in B.C.

"Coal energy has a nasty footprint," said Mr. Ford.

Despite controversies over whose paper is greener, China's appetite for old paper, particularly from the huge pool of waste paper in California, has led to a significant price jump. The export price to Asia has risen to $135 U.S. this month, from a low of $85 a tonne last summer. Prices in Los Angeles are about $150 a tonne, said Catalyst's Mr. Kissack.

Catalyst operates the largest recycled paper plant on the West Coast. The company has an established recycling supply line stretching almost halfway across the country to produce recycled pulp at its Port Coquitlam, B.C., plant for its four coastal paper mills.

Just as the Chinese are using empty containers to ship old paper back to China, Catalyst uses empty rail cars to bring its paper supply here.

Kevin Mason, industry analyst with Equity Research Associates, said demand for recycled paper from China is re-shaping the North American paper industry.

China opened four new mills in 2006 alone, he said, leading to a sharp upward spike in North American paper exports during the last two months of last year.

Newsprint from China is beginning to make its way back to North America. Mr. Ford said test runs are taking place on presses in the U.S. However, Mr. Mason said most of the Chinese newsprint is being consumed in China, or exported to other Asian markets. Where China's appetite is having an impact now, Mr. Mason said, is that as prices for recovered paper climb, higher-cost North American producers are forced to curtail production.

"China is the key, and figuring out what they are going to do is critical," he said.

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